(Updates with analyst comment after shares retreat)
AMSTERDAM, Jan 29 (Reuters) - Signify NV forecast a sales rebound in 2021 after the world’s largest lighting maker reported on Friday better-than-expected fourth-quarter core earnings.
Signify, formerly Philips Lighting, reported quarterly adjusted earnings before interest, taxes, and amortisation (EBITA) of 251 million euros ($304 million), up from 232 million a year earlier and above the 241 million forecast by analysts in a company-compiled poll.
Revenue stood at 1.88 billion euros, up from 1.75 billion euros, boosted by the company’s $1.4 billion March acquisition of Cooper Lighting.
Stripping out the impact of the acquisition, comparable sales fell 5.9% - in line with expectations.
Its shares, which are up more than 15% so far this year, slipped 1.8% to 40.00 euros.
“The ongoing nature of the pandemic means we remain cautious about market developments in 2021,” said Chief Executive Officer Eric Rondolat.
The company said on Thursday it would cut 700 jobs from its global workforce of 37,000.
Rondolat said that while online orders and orders from home users for networked lights had been strong, orders from professional lighting users and for larger projects had not yet recovered.
“If I can sum it up, (there’s) more traction on the consumer side than on the professional side and overall much more traction on our connected business at large versus our non-connected businesses,” he said.
The company forecast positive “comparable sales growth for 2021, the level of which will depend on the recovery pattern in its markets”, with cash flow of at least 8% of sales.
In a note, JPMorgan, which has neutral rating on the stock, said Signify’s results were in line with expectations but criticized the 2021 forecast as “quite vague”.
Geographically, sales shrank most in the Americas and least in Europe, where the company is based.
Signify, which was spun off from Philips in 2016, has seen sales decline for years as customers moved from conventional lights to LED.
Operationally, the company said LED lights now accounted for 82% of all sales, and it had a strong performance in its home “connected” lighting, which was the only unit of its three divisions to see comparable sales rise.
At its conventional lighting division, operating profits rose due to demand for horticultural lights and ultraviolet lights used in disinfection.
$1 = 0.8267 euros Reporting by Toby Sterling; Editing by Jacqueline Wong, Sherry Jacob-Phillips and Emelia Sithole-Matarise